LDN - Business

AccorHotels drops booking service for independent hoteliers

[November 09, 2017] By Dominique Vidalon and Pascale Denis

PARIS (Reuters) - AccorHotels, Europe's largest hotel group, said on Thursday it would pull the plug on an online service that enables independent hotels to offer rooms on its booking website because the scheme had failed to meet expectations.

The decision is a setback for Chief Executive Sebastien Bazin, who launched the initiative in 2015 to fight online travel agents such as Expedia and Booking.com that have been accused of hitting the margins of traditional hoteliers.

"The group has decided to stop marketing independent hotels on its website by end-2017 as the results were mixed," a spokeswoman for AccorHotels said, confirming a report from L'Echo Touristique magazine.

The service had aimed to triple to 10,000 the number of hotels offered on AccorHotels online by 2018. But only 2,000 independent hoteliers signed up.

One hurdle was that clients using the website were more likely to book one of the group's well-known brands such a Pullman, Mercure, Ibis or Raffles than an unknown hotelier.

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The logos of AccorHotels group is pictured during a news conference at the Pullman Bangkok King Power hotel, in Bangkok, Thailand, June 15, 2017. REUTERS/Athit Perawongmetha

Giving small independent hoteliers greater visibility would have required stepping up marketing investments.

AccorHotels, which runs more than 4,000 hotels worldwide and has been expanding through acquisitions in the luxury end of the market and with new concierge services, now wants to focus on integrating and developing its large brand portfolio.

The cost of launching the online marketplace project was estimated at 22 million euros ($25.59 million), on top of the 225 million euros AccorHotels said it would spend to beef up its digital business between 2014 and 2018.

($1 = 0.8598 euros)

(Editing by Edmund Blair)

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